Greater Portland has more renters than new homes, and recent state housing law has opened more residential lots to additional units. For builders with a plan, a permit and a track record, that makes infill duplexes, small multi-family buildings and build-to-rent homes worth a close look.
In short: LendingStreet finances ground-up construction of 1-8 unit investor properties in greater Portland, Maine, including spec homes, build-to-rent houses, infill duplexes and fourplexes and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through a draw schedule after inspections. Plans, permits, budget and builder experience drive approval.
Remaining buildable lots inside Portland are scattered and expensive, so most investor construction is infill: a duplex on a leftover lot in Deering or Riverton, a small building on an assembled parcel near Forest Avenue, or an addition of units where zoning now allows it. Westbrook, Gorham, Windham, Scarborough and South Portland offer more land and simpler sites, and Biddeford and Saco have seen renewed building around their downtowns.
Demand for new rentals in the metro comes from a mix of healthcare, education, the port and a growing remote-work population. New units with heat pumps, good insulation and in-unit laundry compete well against older peninsula apartments, which often lack all three.
Maine's 2022 housing law (LD 2003) required towns to allow accessory dwelling units and more than one unit on many residential lots, with each town writing its own implementing rules. Portland, South Portland and the suburbs adopted their versions on different timelines. Confirm the current zoning, lot size, setbacks and parking rules with the town planning office before you price land.
Water and sewer capacity, stormwater rules and driveway access can matter as much as zoning. In the suburbs, some lots rely on private wells and septic systems, which changes your site budget and your timeline. Get these questions answered before you close on the land.
This example is illustrative and not a quote. A builder buys a lot for $165,000 and plans a side-by-side duplex with $545,000 in hard costs and $70,000 in soft costs for design, engineering, permits, impact and connection fees and insurance. Total project cost is $780,000.
At 80% of cost the loan is $624,000 and the builder contributes $156,000, usually with the land counting toward that share. Terms are set per project; the figures here only show how loan-to-cost sizing works.
Lenders want to see that the finished project supports the loan. For a build-to-rent duplex, that means projected rents that can carry a DSCR refinance; for a spec home, it means recent sales of comparable new homes nearby. Bring both if you have not yet decided which exit you will take.
| Draw | Share of hard costs | Amount |
|---|---|---|
| Foundation and site work | 15% | $81,750 |
| Framing and roof | 25% | $136,250 |
| Mechanicals and insulation | 20% | $109,000 |
| Drywall and interior finishes | 25% | $136,250 |
| Final and certificate of occupancy | 15% | $81,750 |
| Total hard costs | 100% | $545,000 |
Construction funds are released as work is completed. You request a draw, an inspector confirms progress against the budget and the approved amount is funded. Interest is charged on what has been drawn, not the full commitment. Our draw schedule calculator helps you map stages to a timeline.
Keep your draw requests organized. Invoices, lien waivers from subcontractors and photos of completed work help inspections go faster, which means funds arrive sooner and your subcontractors stay on schedule. A builder with a clean draw history also tends to get better terms on the next project.
Frost depth, snow load and short winter days shape Portland construction schedules. Foundations poured late in the fall need protection, and framing in January is slower and costlier. Many builders break ground in spring so the shell is closed in before cold weather, then finish interiors over the winter. Maine's statewide building and energy code also sets insulation and air-sealing standards that affect budget.
Material lead times are another factor. Windows, heat pumps and engineered lumber can take weeks to arrive, so order early and build those dates into your schedule. A delay in one stage pushes every later draw.
Approval depends on readiness as much as on numbers.
Raw land with no plans or permits, projects where the borrower has no build history and no experienced general contractor, and commercial buildings of nine or more units fall outside these programs. For larger buildings, see our multifamily loans page.
A spec home is built to sell, and the loan is repaid from the sale. A build-to-rent project is built to lease, and the loan is repaid by refinancing into a long-term DSCR loan. The choice affects your design: rentals favor durable finishes, simple layouts and separate utilities, while spec homes for owner-occupant buyers often justify higher-end finishes.
In greater Portland, infill duplexes often work both ways. You can sell both sides, sell one and keep one if the units are set up as condominiums, or keep both as rentals. Decide early, because a condominium setup requires legal work before you sell.
When the certificate of occupancy is issued, you can sell the homes or lease them and refinance into a 30-year DSCR loan qualified on rent. Send your plans, budget and timeline through the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. See our Maine construction loan page for statewide details.
Investor projects of 1-8 units: spec homes, build-to-rent homes, infill duplexes and fourplexes and small 5-8 unit buildings.
On loan-to-cost, meaning land plus hard and soft costs. Terms are set per project after we review plans, budget and experience.
Plans and permits, or a short and clear path to them, are expected. Projects without them usually do not qualify.
Usually only with an experienced general contractor on the job and a realistic budget and schedule.
No. It required towns to allow more units on many residential lots, but each town sets its own details. Check local zoning for your parcel.
After an inspection confirms the work. Funds are released through a draw schedule tied to your budget.
Yes. Lease them and refinance into a DSCR loan that qualifies on rent.
Terms are set per project based on your schedule. Build in time for Maine winters and material delays.
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